Transfer of Property PDF

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Transfer of Property Consensual Transfers 1. Contract of sale of goods: seller and buyer 2. Gift: donor and done 3. Testamentary Transfers 4. Quasi-testamentary transfers: donatio mortis causa Gift  Requirements for there to be a gift of chattels: (1) Donor must display a clear intention to transfer to the donee his interest in the object that is being given  AND (2) There must also occur EITHER a. physical delivery, or b. the execution and delivery of a deed, or c. an effective declaration of trust. Delivery  Actual/constructive delivery  There must be a clear, unequivocal transfer of possession, even clear words of gift not making up for imprecision in the act of delivery (must have two elements at the same time)  Evidentiary nature – retaining some nature of power to use, not a gift Re Cole Physical  A husband introduced the wife their new home and handover is informed her that she had the all the things needed  The husband has brought her to the home but there is too much property in the house, everything in this house is yours  The court said there is never actually be a physical handover of any goods Lock v Symbolic  Symbolical delivery, where a chair was delivered to the Heath delivery is wife with couples of words enough  I GIVE YOU SOME INVENTORY OF THIS CHAIR  Delivery physically as samples is sufficient Rawlinson Fulfilling both  The owner of a church organ originally lend to the organ v Mort requirement to the church but later changed his idea to donate it to the church  With some words has been made and papers are handed over  The nearest thing of the physical transfer the donor can do as he cannot take up the organ and handover it Gift by Deed (execution)  Historically a deed was a document that had been signed, sealed and delivered.  Ss19 and 20 of the Conveyancing and Property Ordinance (CAP. 219) for land  Ss 127 and 128 of the new Companies Ordinance for shares Trust  Declaration of trust, will transfer the beneficial interests to the donee  But Equity will not assist a volunteer or perfect an imperfect gift, the trust will not be freely discovered as gift by delivery  Constitution of the trust is needed Milroy v Settlor must  The settlor attempted to create a trust by transferring

Lord

have done everything necessary to transfer the property according to the nature of the property

Re Rose

He had done everything in his power to transfer title to the trustees

Pennington v Waine

Unconscionabl e for Settlor to recall the gift,

shares to Lord to be held for Milroy. However, the share transfer was never registered in the company records by the settlor.  Lord had powers of attorney and could have registered the transfer but did not.  Milroy asked the Court to enforce the trust as there was clear evidence that the settlor had intended to create a trust. held that  there had been no transfer of property thus there was no trust because it remained unconstituted.  For the constitution of a trust or the perfection of a gift, equity required that ‘the settlor must have done everything which, according to the nature of the property comprised in the settlement, was necessary to be done in order to transfer the property and render the settlement binding upon him.’  The settlor should have transferred the shares in the required manner to the trustee, Lord, for the trust to be constituted.  the court had to consider whether the trust was constituted when Rose had done everything within his power to transfer the shares, or was it constituted two months later, when the directors approved the transfer to the trustees.  The latter would follow the principle in Milroy v Lord and Re Fry, as Rose had not done everything necessary to transfer the shares as he had not obtained the consent of the directors.  Judgment: the Court held that March 1943 was the effective date for the transfer of the equitable ownership of the shares.  Rose was a trustee of the shares from that date with beneficial interest vested in the trust he was setting up. The Court was not upholding an express trust but recognizing that Rose had done everything within his power to transfer the shares to his trustees when the deed was executed. He had divested himself of the beneficial ownership in favour of the beneficiaries of the express trust and held legal title purely on constructive trust to be passed to the trustees for the benefit of the beneficiaries.  Trust constituted (or gift perfected) if S does everything in his power to divest himself of the trust property  Now have to rely on the third party to finish the transfer  Ada wanted to give shares to H  Ada gave signed share transfer to P, her accountant  Ada died before the delivery and transfer is done by P 

the conscience of the donee is affected

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Another set of the shares in will is given to H, together with 2 sets of shares, H will become the director of the company Held that the transfer took effect when the transfer form was signed o Ada had not done all that was necessary to perfect the gift and so failed the rule in Milroy v Lord. She had also not done all within her power, as Pennington was her agent and seen as an extension of her, thus as he had not done all within his power to transfer the shares this failed the rule in Re Rose. LJ Arden: It would be unconscionable for C to recall the gift

Transfer of Intangible Property  Necessary to divide intangible property into pure intangibles (e.g. debt, intellectual property) and documentary intangibles (e.g. share certificates, bills of lading)  Property in pure intangibles is transferred by assignment Assignment of pure intangibles Debt - equitable assignment  Assignee could call upon debtor to pay him instead of assignor, discharge the duty to repay the debts of debtor  All the transfer is through documents as you cannot actually touch the debts, intangible  Debtor and assignee, assignment replace the earlier relationship between debtor and assignor as debtor and creditor  The court of equity developed the notion of assignment of debts in this way  No words is required  Proof of clear intention to transfer and item of intangible property being transfer Requirements 1. No particular form of words is required for there to be an effective equitable assignment, it is merely sufficient to establish a clear intention to transfer an item of intangible property to the assignee 2. The assignee must consent to the assignment for it to be effective but there is no need for the debtor to be informed of the assignment: 3. An equitable assignment need not be in or evidenced by writing 4. Consideration is not necessary to support a valid equitable assignment PROVIDED the assignment is an immediate transfer of an existing proprietary right: Re McArdle Brandt’s requirements  The assignor agreed with the bank, being the assignee, Sons & Co v that goods sold by the merchant (debtor) should be paid Dunlop for the remittance directly Rubber Co  The bank has given notice to the assignor that the merchant has assigned the debts to the bank  Evidence of equitable assignment of the debts to the bank with notice to the purchaser, the bank can recover the debts from the purchaser  The language of command, and maybe the request and permission, the language is immaterial if the intention is clear  The assignee must consent to the assignment for its to be effective, there is no need for the debtor to be informed of the assignment

If the assignor has assigned the debts to more than one assignee, the priority to claim depends on who notified the debtor first, should always give notice for safe Effective Gorringe v  B owed C money Irwell India equitable  B wrote to C saying we hold your disposal the debts due to assignment Rubber us from A…..until the debts to C was being repaid by B to C Works  C notified A of the assignment  B went into insolvency  It is important therefore to know the equitable assignment have completed before the insolvency, if not the debt will go to the liquidator for all creditors but not C  There is an effective equitable assignment, the debts no longer a property of B Legal Assignment of pure intangibles, e.g. debts  Assignment satisfies the formalities as required  Pure intangible like debts firstly assign to A equitably then legal assignment takes place to B then the legal assignment will take priority before the equitable one  A legal assignment must comply with s9 of the Law Amendment and Reform (Consolidation) Ordinance (CAP. 23) “LARCO” o S9 applies to all assignments except assignments by way of charge and conditional assignments (which are not absolute assignments) o Assignment must be in writing cf equitable assignment o Notice given to the debtor must be written notice; no particular form of words is prescribed  Subject to equities o Includes defences and certain claims of the debtor against the assignor that fall within the limits of the rules concerning set off, regardless of whether the assignee has or has not notice of these at the time of the assignment Gilbert-Ash Subject to  A building contractor failed to finish the work, as one the (Northern) equities condition for payment Ltd v  The payment was assigned to someone by the contractor Modern  But as the contractor has done not enough to claim the Engineerin payment, then the payment is not entitled to be paid by the g (Bristol) debtor to the assignee Ltd  Can act as a defence  And if the contractor, the assignor has fulfilled the condition but badly, then the debtor may have a counter claim to this assignment Priorities Between Assignees  The basic priority rule where there are successive transfers of either legal or equitable property, real or personal, is that the first in time prevails.  Exception in the case of assignment of things in action (intangibles ) is the Rule in Dearle v Hall o The first of two or more assignees for value to give notice of the assignment to the debtor will have priority o Includes an assignment by way of charge o Proviso to the rule is that the assignee who first gives notice to the debtor must not have notice of an earlier assignment: Notice may be the constructive notice of being 

put on inquiry o If the competing assignees give notice on the same day, priority between them will depend upon the date of the creation of the assignments; Re Dallas...